As a result, Sri Lanka`s relations with China have developed through Buddhism, trade and the support of more strategic relationships based on infrastructure development and global networking. In addition, China has always supported Sri Lanka in world forums (particularly during the civil war and the immediate post-war period), based on a common understanding of certain fundamental norms of international relations, such as non-interference in the internal affairs of states. As such, China has been and remains a key partner in Sri Lanka`s economic development and a reliable friend of Sri Lanka on the world stage. Diplomatic relations between Sri Lanka and China were established in 1957. The first agreement after the establishment of diplomatic relations was economic and technical cooperation, signed in 1962 after the visit of Prime Minister Sirimavo Bandaranaike to China. This has helped Sri Lanka further support infrastructure projects such as the Bandaranaike Memorial International Conference Hall (BMICH). In 1963, the two countries signed an agreement on maritime trade relations. The China-Sri Lanka Joint Trade Committee was established in 1982, while an economic and trade cooperation agreement was signed in 1984. These two agreements were merged in 1991 to form the Joint Commission of Sri Lanka and China. The Joint Commission had broader objectives, including the exchange of information and the extension of lending facilities for various development projects. In 1994, the Sri Lanka-Chinese Business Cooperation Council was established to further improve trade and investment relations between the two countries.

With regard to cooperation in international for a, Sri Lanka supported the draft resolution that facilitated China`s accession to the UN Security Council in 1971. Sri Lanka also supported China`s accession to the World Trade Organization (WTO) in 2001. However, for India, this dynamic indicates that it has failed to strengthen trade relations within the South Asian region, a situation that India does not enjoy. In 2015, China became Bangladesh`s largest trading partner, which is expected to be the case for Sri Lanka in the near future. It is precisely this idea that could prompt India to accelerate the proposed ETCA signing process with Sri Lanka and remove barriers to bilateral trade. The recent escalation of economic relations between China and Sri Lanka has been the subject of much discussion, debate and analysis. Some of these discussions are also rich in misinterpretations, such as frequent misunderstandings about Sri Lanka`s debt liabilities to China and the link between that debt and the decision to lease the port of Hambantota to China for 99 years.